Business Articles

The Strategy of Microsoft versus Linux

1. Introduction

Microsoft and Linux are tow competitive organization and have a relatively strong position within their industry. The purpose of this paper is to identify the strengths, weaknesses strategies of these two organizations and compare them by contrast.

2. Microsoft history

Microsoft was founded on 1975 in Albuquerque, new Mexico, by Bill Gate after he dropped out of Harvard and teamed up with his school friend Paul Allen attempting to sell a version of the programming Language Basic. In 1979 Gates moved Microsoft to his native Seattle and was creating software that allowed others to write programs. One of Microsoft’s biggest successes was when IBM (in 1980) chose Microsoft to write the operating system for its new machines.

In 1983 Allen left Microsoft and in 1986 the organization went public (7).

2-1.Review Microsoft’ Mission /Vision

In general, a mission statement discovers the fundamental purpose of the organization and gives information on what the organization does, whom it serves and how differs from similar organizations (Dyck, 2010 p.234).

According to Dyck (2010) vision statement explains what an organization is trying so hard to become (Dyck, 2010, p.235).

In the strategic management process the first step is to review Mission and vision of the organization (in our case Microsoft) to ensure the continuum of the organization’s strengths and weaknesses (Dyck, 2010 p.260).

Microsoft’s mission is to help people and businesses throughout the world comprehend their full potential.Microsoft tries to understand, value, and incorporate the differences each employ brings to the organization so that Microsoft can build the greatest multicultural workplace in the technology industry and reflect the growing diversity and inclusion of American communities and the global market place (mission) (8).

Microsoft is committed to its customers and partners and holds itself accountable to its customers, shareholders, partners, employees (Mission) (8).

Microsoft’s vision is:” to think and to act globally” also to establish Microsoft as global leader in diversity, to build value and commitment for work-life balance, and to build capacity for people and organizations (Vision) (11).

2-2. Analyze Microsoft’s external and internal Factors

The SWOT analyses (which is the second step on the strategic management) observes organization’s internal strengths and weaknesses in light of external opportunities and threats (Dyck, 2010, p.260).

Microsoft’s strengths:

a) Distinctive competence: Microsoft’s operating system has been the industry standards for decades (Dyck, 2010, p. 286).

b) Competitive strategy: Microsoft has control over other software manufactures.

c) Sustained competitive advantage: Microsoft “locks in” users to its product by using its patent rights and proprietary knowledge, Property knowledge of software are not sold and strict restrictions exist on copying and modification of the software (Dyck, 2010, p. 286).

Microsoft’s weaknesses:

a) - Organizations is very centralized

b) - Organization has a high dependency on management hierarchy patenting

c) - Its severe restrictions are complicating its relationships with vendors and other competitors

Microsoft threats

a) - Supplier bargaining power: Microsoft has complicated the relationship with vendors specially because of the restriction and “lock in” practices (Dyck,2010 286).

b) - Customer bargaining power: Microsoft’s prices are higher than its competitors especially in big sized countries like china and India who are the future markets of the industry.

c) - Intensity of rivalry among competitors: Microsoft faces a very intensive competition. Microsoft’s top competitors are Google IBM Oracle, Apple, Read Heat (8).

2-3. Formulating strategy (Microsoft)

Formulating a strategy is the third step on the strategic management and is completed with the assistance of in formations and insights received during SWOT analyses (Dyck, 2010, p.267).

The strategy that Microsoft is utilizing within it industry is called Business –level strategy. Microsoft has the intention to retool its product line and shift the focus of computing away from the hardware devices towards internet based software (7).

Microsoft’s diversity and inclusion strategy is an important part of its business. The pillars of Microsoft diversity and inclusion strategy are:

a) Driving leadership accountability and ownership

b) Attracting, developing, retaining a diverse workforce

c) Creating a culture and climate of respect and inclusion (12).

2-4. Impliment strategy (Microsoft)

Final step on strategic management process is implementing the strategy. After going through the first 3 steps of the strategic management the last step is to implement the chosen strategy.

Microsoft is one of the most complex organizations a big challenge at Microsoft has been the communication between executives and employees. After going through first three steps of strategic management managers of Microsoft implemented the chose the decision:

To improve the internal communication by utilizing the new technology Blogs, Podcasts and Webcasts e-mail postcards (6).

3. Red Hat/ Linux’s History

The beginnings of Red Hat go back to 1968 when Arpanet was founded. Arpanet allowed researchers to share code and information. On 1969 the first version of UNIX was written and was commercialized by AT&T. It was Linus Torvalds who releases the Linux Kernel on 1991. In 1993 Young incorporates ACC Corporation, a catalog business that sells Linux and UNIX. On 1994 Marc Ewing creates his own distribution of Linux called Red Hat Linux. Red Hat was named public company of the year 2008 by North Carolina technology association Today Red Hat is the world’s leading open source solution provider (3).

3-1.Reviey Linux’ mission, vision

Red Hat /Linux’s Mission:

To be the catalyst in communities of customers, and partners creating better technology the open source way (5).

Red Hat /Linux’s Vision:

To enable Any Application, Anywhere, Anytime (4)

Accelerating business execution while driving higher quality and customer satisfaction by utilizing Service – Oriented Architecture (SOA)

Creating the ability to not only to respond to opportunities and threats but to identify them as early as possible (2)

3-2. Analyze Linux external and internal factors

It is obvious that Linux has adopted the multistream approach, which emphasizes nurturing

trust, community among suppliers and buyers Dyck, 2010, p. 278).

Linux’s strengths:

Inimitable , (Tech others)(Duck,2010, p. 280) :Linux utilizes open source approach which permits everyone to copy ,modify ,improve cods as long as they are transparent about the modification and make them freely available to the public encouraging collaboration and restricting monopole (Dyck, 2010, p. 287).

Valuable, (Enhance the well being of humankind), (Dyck, 2010, p. 280): Lunix values knowledge, sharing wide engagement, and seeks to protect the interest of the public and customers (Dyck, 2010, p. 287).

Bridge building among organizations (Dyck, 2010, p. 277): IBM, Dell and Intel contributed money and programmers to open source software and invested on Red Hat. Easy contribution and decentralized collaboration among programmers working independently Linux operating system is smaller than Microsoft’s. Also being inexpensive attracting students, poor individual, education institutions and majority of developing word (Dyck, 2010, p. 287).

Linux’s weaknesses:

A big problem for Linux and open sources customers is the fact that they do not know the pedigree of the code. This is considered a big risk for the customers. A second risk: Open source licenses are not consistent, and many customers are not aware of the fact that open source licensees have any stipulation. A third risk is the vulnerability to litigation owners of contested code. Commercial software developers indemnify customers in the event of such legal action, but Linux distributors do not (10).

3-3.Formulating strategy (Linux)

As Dyck (2010) conforms there are two types of multistream strategies: minimizer strategy and transformer strategy (p.282).Linux is an organization that outlines broad-reaching product strategy. Linux continually have a strategy in place to provide a verity of tools and services to the customers, and to offer customers a solution with outstanding performance (11).www.redhat.com/about/news/prarchive/2009/agenda.html

3-4.Impliment strategy (Linux)

From multistrem point of view the most important work of Linux strategic management is to engage in the strategic learning that accurse while implementing strategy. It is vital for Linux and any other organization that while implementing the strategy to: learn from other stakeholders, and focus on emergent strategies (Dyck, 2010, p. 285).

4. Linux a threat to Microsoft

Linux is a future threat to Microsoft this conclusion is supported by the facts listed below.

Linux is more preferred compared to Microsoft because:

Linux source code is open and provides some insurance about security VS the concerns that Microsoft Windows contained a “back door”.

Microsoft users (especially deferent governments) are concerned of becoming dependent on Microsoft.

Using Linux – based systems has significant advantages VS using Microsoft’s expensive ones.

Software developers and other organizations see Linux as a driving force that could break the Microsoft monopoly.

The battle between Linux and Microsoft can be seen as of crucial national importance in the search to develop an IP regime that will benefit developing countries like China and India by balancing the protection of the interests of producers and users, and of private and the public, to create an IP regime which will ultimately encourage innovation and global connectivity as well as localization (13).

5. How can Microsoft minimize the threat of Linux

Make the product more affordable

Eliminate the “lock in” system

Become more accessible and easy to work with other organizations

To provide better support to corporate and government customers

Simplify its products.

6. Strategic approach of the future

Mainstream strategic management will be dominant (at least for one more century) Even though we witnesses attempt for different organization to adopt the multistream strategic management it is a fact that the majority of the organization and their management are more concerned about their financial well being .There is not enough evidence to prove that too many organizations are concerns with the multi stakeholders overall well being .There are no technological and social issues. Majority of the organizations show little or no concern towards ecological and social issues.

7. Conclusion

I our modern society and today’s market no organization (no matter how big in size or strong financially) can keep its strong position forever and be safe from the competition. Even the organization with strong fundamentals must work hard, make adjustments and be vigilant to maintain their position.

References

1 - Dyck, B. & Neubert, M. J. (2010). Management Current Practices and New Directions.

Boston: Houghton Mifflin Harcourt Publishing Company.

2 - Fricke, P. (2007). Red Hat’s SOA Vision. Retrived September 23, 2009 from

press.redhat.com/2007/04/24/red-hat-soa-vision

3 - History. Red Hat. Retrieved September 23, 2009 from

www.redhat.com

4 - Kerner, M. S. (2007. Red Hat’s Vision. Internetnews.com. retrieved

September 23, 2009 from

www.internetnews.com/dev-news/article.php/3709776

5 - Look inside Red Hat. Red Hat. Retrevied September 23, 2009 from

www.redhat.com/about/